Stunning Setback to Obamacare

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Obamacare has proven again to be the biggest legislative failure in history, with last week's ruling that its subsidies are illegal. These subsidies induced some 5 million Americans to sign up for Obamacare but are prohibited by law as held by the U.S. Court of Appeals for the D.C. Circuit in Halbig v. Burwell.

This humiliation to the Obama administration was a devastating setback to legislation already disfavored by a 59-40 percent margin among the public, according to the latest CNN poll. Twice as many Americans say they are being hurt rather than helped by Obamacare.

Officially known as the Patient Protection and Affordable Care Act, Obamacare is neither affordable nor protective of patients. It promised subsidies for millions of Americans to buy new health insurance and to pay costly premiums that have driven insurance company stock values to record highs.

People in households making between 100 percent and 400 percent of the federal poverty line (between $11,670 and $46,680 per year for one-person households) have been getting subsidies to buy insurance on health insurance exchanges. A staggering 90 percent of those who signed up for this Obamacare insurance did so in reliance on these subsidies, which the court just ruled are illegal.

These health insurance exchanges are much more than marketplaces, like Travelocity or Expedia, to make it easier to shop for and buy health insurance. They are also the vehicle for dispensing subsidies and imposing penalties, while also building big brother-like databases about Americans.

The liberal central planners inside the D.C. Beltway thought the 50 States would comply with President Barack Obama's demand that they set up these health insurance exchanges at costs estimated to be as much as $100 million per exchange. As an incentive for states to set up these exchanges, the law provided substantial subsides to people who sign up for a state-established exchange.

The central government planners thought the subsidies would coerce states to establish their own health insurance exchanges, similar to how the federal government coerces states to obey D.C. commands in other fields such as education. But states balked after they saw how much control they would be giving to the federal government by establishing a state exchange and how expensive they would end up being.

Nearly two years ago, noted patient advocate and registered nurse Twila Brase explained why "a state-established exchange is a federal takeover center." State exchanges would be required to obey federal regulations, report annually to the federal secretary of Health and Human Services, and comply with a list of federally mandated Essential Health Benefits as dictated by the HHS secretary.

Her conclusion: "Just say no," because "refusing to build the state exchanges is key to stopping Obamacare." More than two-thirds of the states -- 36 of them -- have done just that.

States do not work for Obama, which he has been slow to figure out. Democrats were crushed in the landslide midterm elections after the passage of Obamacare in 2010, and a repeat performance looms large with the next midterm elections barely three months away.

Back in 2010, Obama was riding high and then-House Speaker Nancy Pelosi demanded passage of Obamacare by declaring, "We have to pass the bill so you can find out what is in it!" But now Democrats are angry at what the D.C. Circuit told them is really in the bill.

Perhaps Obama and his lieutenants should have read the bill before railroading it through Congress. The text of Obamacare expressly states that the subsidies for the purchase of health insurance on an exchange are available only for an "Exchange established by the State," and the Obama administration broke the law by subsidizing the purchase of health insurance over federal rather than state exchanges.

The D.C. Circuit admirably upheld the law as it was passed and properly rejected attempts by the Obama administration to rewrite it now. The Court admitted that "our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly," but confined its ruling to interpreting the law rather than rewriting it as Obama seeks now.

Adding to the chaos, on the very same day as this defeat of Obamacare in the D.C. Circuit, another federal appellate court upheld it. That is like one umpire calling a pitch as a "ball" after another umpire had declared it a "strike."

Chief Justice John Roberts testified during his confirmation hearings that a judge should limit himself to the role of an umpire, calling the balls and strikes without changing the rules of the game. It is refreshing that a panel of judges on the D.C. Circuit did exactly that in applying the law as it was written, not rewriting it as Obama now wishes he had written it.

Phyllis Schlafly is a lawyer, conservative political analyst and author of 20 books. She is the co-author, with George Neumayr, of the New York Times Best-Seller titled "No Higher Power: Obama's War on Religious Freedom." You can read more of her writings at eagleforum.org.